Sex DVD scandal turns spotlight on Greece's ills

By Dina Kyriakidou

ATHENS (Reuters) - As Greek scandals go, it started as a trivial but titillating tale -- a ministry official jumps from his balcony after being blackmailed by an angry lover.

Many Greeks yawned. Few suspected that what would soon be known as the "sex, lies and DVDs scandal" would effectively freeze planned reforms, push the conservative government closer to snap elections, and shake the foundations of Greek society.

"This scandal has shown us what has been happening for years but none of us would publicly admit," said architecture student Victoria Deligianni, 24, sitting at a central Athens cafe. "There is just no progress in this country."

Political analysts say the affair has turned the spotlight on all of Greece's ills -- nepotism, widespread corruption in politics and the press, sexism and lack of opportunity for qualified young people with no connections.

It was no secret Greece was in need of a cleanup in 2004, when voters fed up with socialist scandals in the 1990s voted in the conservative New Democracy party.

Prime Minister Costas Karamanlis vowed to "re-launch the state" and end the chronic corruption that had long angered citizens and kept many foreign investors away.

He also promised to put in motion the reforms Greece needed to catch up with its European Union partners -- in education, social security, health and public services.

Instead, the public has been treated to a series of scandals. In the past year alone, overpriced government bonds were sold to state pension funds and a labor minister was sacked over illegal Indian workers at his country house.